Businessman disagrees with buffering plan

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by Chris Tobin

Most submitters to Timaru District Council’s annual plan favoured increasing rates 2% using $3million of reserves and savings to cover a funding shortfall, but not prominent businessman Gary Rooney and his company Rooney Group Ltd.

Mr Rooney said in his submission to the council’s 2020-21 annual plan that to do so would be like robbing Peter to pay Paul and was not sustainable management for any business.

“Who knows what tomorrow will bring and the environment may be harsher than it is today.

“All you would do is transfer the problem to a later date where the accumulated cost has to be catered for.”

He said a clear example was that the council had used Alpine Energy’s dividend to offset rates for many years.

“This has created a reliance on that dividend which, for all intents and purposes, has become a windfall to offset council’s true costs.

“Now when it is no longer available, ratepayers need to fund that shortfall as they should have done from day one .”

Mr Rooney said Alpine Energy’s dividend should have always been used for public good such as a stimulus fund for the benefit of the whole community.

The second rates option was not to use any reserves or savings which would result in a total rates increase of 7.73%.

A total of 47 submitters responded to the two options with those in favour of option 1 exceeding the second option by two to one.

“Any attempt to lessen the rates increase by dipping into reserves is strongly opposed by Rooney Group Ltd,” Mr Rooney said.

The usually publicity-shy businessman made a rare public appearance at the hearings on Tuesday to emphasise his points.

“I’m not here to complain. I’m here to support the council in its decision-making”

A staff report to Tuesday’s hearings said option 1 was favoured due to Covid-19.

“Submitters suggested efficiencies and savings could be made in other areas or delaying projects but also suggested some support mechanisms be established to help struggling ratepayers.”

The use of reserves meant not all operational expenditure for 2020-21 was covered by the revenue the council collected, for example rates, fees and charges and Waka Kotahi (NZ Transport Agency) funding assistance.

“The effect is at a later date, the rates increases will be greater than they would otherwise have been. While reserve funding is sustainable in the short term it is not a financially sustainable long-term model.”

Three submitters to the annual plan asked how much consultants had cost the council over the the last five years. The response was: 2016 ($1.1million), 2017 ($1.3million), 2018 ($1.9million), 2019 ($3.3million). The total for 2020 was estimated to be $2.7million compared with a budgeted amount over $2million.

“Consultants’ costs vary as much of it is related to large multi-year capital projects and plans such as the district plan or other work streams introduced post the most recent long-term plan,” the council report stated.

  • Later in the meeting the council voted in favour of option 1 to use $3million of reserves and savings to keep the 2020/21 rates increase to 2%.